Question

The owner of Maumee Motors wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at Maumee Motors during the last year:

Car	Age (years)		Selling Price ($ thousands)		Car		Age (years)		Selling Price ($ thousands)
1	8		$9.5		7		6		$10.0
2	13		5.5		8		2		5.5
3	7		9.7		9		1		9.6
4	15		3.6		10		4		3.1
5	9		3.2		11		9		7.0
6	8		4.8		12		1		3.7

      

a. Determine the correlation coefficient. (Negative answer should be indicated by a minus sign. Round the final answer to 3 decimal places.)      

          

r = ________

     
b. Determine the coefficient of determination. (Round the final answer to 3 decimal places.)

         
c. Interpret these statistical measures. Does it surprise you that an inverse relationship exists? (Round the final answer to the nearest whole number.)

Weak negative (inverse) correlation between age of car and selling price. So, _______ percent of the variation in the selling price is explained by the variation in the age of the car.

Answer 1

The statistical software output for this problem is:

Hence,

a) r = -0.176

b) Coefficient of determination = 0.031

c) Weak negative (inverse) correlation between age of car and selling price. So, 3 percent of the variation in the selling price is explained by the variation in the age of the car.